Business Opportunities Expanding with the Food Functional Claims System ① ~Background of the New System's Establishment and Future Outlook~ Part 2

On April 1st, Japan's new functional food labeling system came into effect. This major revision, the first in 44 years, raises questions: How will the Japanese market change? How will business opportunities expand? Members of Dentsu Inc. Healthcare Team interviewed experts.

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The new functional claims system could become a trump card for regional revitalization and holds the potential to elevate Japan's food regulations to global standards . This is according to Professor Ryuichi Morishita of Osaka University Graduate School, who served as a member of the Cabinet Office's Regulatory Reform Council and was deeply involved in designing the system. We asked him about the significance of this major revision—the first in 44 years—beyond just functional claims, along with the background leading to its establishment and future prospects.

The New System as a Tool for Personal Health Awareness

Kobayashi: The new functional claims system seems likely to have various impacts on public health awareness. How should we approach it going forward?

Morishita: That's a crucial point. In the U.S., functional foods are regulated under the Dietary Supplement Health and Education Act. As the word "education" in the title suggests, its fundamental premise is educating the public. The aim is to encourage each individual to learn about their own health. Japan's new system shares this fundamental philosophy. Through functional claims, we want people to renew their interest in their own health. To achieve this, even after the system is implemented, the government must continue to prioritize educational and awareness activities for the public. We also hope citizens will recognize functional claims as a tool to help them care about their health and maintain it.
In the United States, since allowing functional claims for supplements, there has been an actual decrease in cerebral infarction and myocardial infarction. It is said that the success likely stems from the system encouraging more people to take an interest in their own health, leading more individuals to change their daily dietary habits and lifestyle. Changing the health consciousness of the public. That should be the very purpose of the functional claims system.

A system where the fruits of a company's efforts and hard work yield greater rewards

Kobayashi: From a business perspective, it seems the base of players in the food industry and health sector could broaden.

Morishita: Exactly. Until now, the healthcare industry was perceived as a very limited field, focused on pharmaceuticals and medical devices. Moreover, regulatory hurdles were high. Japan is a rare longevity powerhouse globally, with an enormous market right before our eyes, yet the number of companies able to enter it was extremely limited. One strategy to open up this market and broaden its base is this new functional claims system. Furthermore, looking at the food system as a whole, the regulations and procedures for the existing Tokuho (Specific Health Use Foods) are also being considered for relaxation. Therefore, I believe the system will evolve so that companies that put in the effort will reap greater rewards commensurate with their hard work.

Kobayashi: In agricultural products, the Japan brand is now attracting attention overseas, and there's potential for even greater added value there.

Morishita: If prices are 1.5 or 2 times higher than overseas products, it's difficult to get people to buy them. However, if you add the benefit of being good for health, that changes the story. If we can label rice as "suitable for those with slightly elevated blood pressure" and ensure safety and security, it should become quite competitive globally. Or, by promoting apples labeled as "promoting fat breakdown" or "aiding fat burning" with safety assurances, they might sell well in places like the US. The key point is that it's not just about taste. Japan is actually aiming to be the first in the world to do this, and the Ministry of Agriculture, Forestry and Fisheries has been researching it for a long time.

Building evidence to advance to new product development steps

Kobayashi: What other topics were discussed at the Regulatory Reform Council?

Morishita: Regarding supplements, there was a lingering perception that they couldn't be sold in medical institutions. We clarified that they can be sold. In fact, there was no legal basis prohibiting sales; they were always permitted. However, there were cases where public health centers enforced restrictions. This wasn't excessive regulation, but rather administrative enforcement based on misinterpretation. The Ministry of Health, Labour and Welfare has never stated that supplement sales are prohibited. A similar situation occurred with contact lenses. There were cases where public health centers instructed that they couldn't be sold in medical institutions, but in reality, there was no legal basis for this. Similarly, operating fitness clubs within medical institutions is permissible if the purpose is for patients or their families to use them, yet many stakeholders in the medical field believed this wasn't allowed.
Upon investigation, we often find cases where guidance is issued without basis, or where medical institutions themselves hold misconceptions due to insufficient information or knowledge. When undertaking new regulatory reforms, we must systematically address and correct these entrenched bad practices and erroneous perceptions that have become commonplace, while organizing the relevant information.

Kobayashi: It's also said there are challenges regarding how to protect the profits of the original manufacturer when other companies follow suit with similar products for functional foods.

Morishita: Fundamentally, since reviews are based on publicly available research papers, it's best to assume that exclusive protection of prior knowledge cannot be guaranteed. However, when using others' papers in notification documents, any usage that infringes on copyright is problematic. Regarding this, the Anti-Aging Medical Society and the Anti-Aging Association seem to be considering assisting with research reviews and documenting the review content in data books to help protect copyright. That said, the reality is that we cannot guarantee full compliance. This is where companies need to shift their mindset. Rather than seeking first-mover advantages, they should focus on continuously developing new materials. Otherwise, it won't contribute to public health. The ideal path is for them to discover new materials and ingredients, patent their manufacturing methods, accumulate evidence-based data, and then create new health-related products.

Many companies should compete on the same playing field to contribute to public health improvement.

Kobayashi: Finally, I'd like to ask: How would you respond to those concerned that lifting restrictions on functional claims might harm consumers?

Morishita: To me, that's completely unfounded worry. Rather, the previous state was completely unregulated, and we had no idea what was happening. Under the new system, companies applying for functional claims must also submit information on potential health risks associated with their targeted foods or ingredients. Naturally, this information becomes public upon application. Initially, when the system starts, there might be a temporary increase in reported health risks, but that's simply because previously unseen issues are now coming to light. In fact, this transparency will ultimately help reduce health risks. We're creating a new system and strengthening regulations, but there are benefits too. So, the aim of this system is also to get as many businesses as possible on board, to collectively understand the public's health status, and to contribute to improving public health. In that sense, I believe it will become a much clearer food system than before, one that benefits the public.

Kobayashi: I understand perfectly. Thank you very much.

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What is the Food Functional Claims System?

The Food Functional Claims System commenced in April. This system allows manufacturers to make claims about a food's functionality "under their own responsibility" by notifying the Consumer Affairs Agency, provided they have scientific data substantiating both safety and functionality. Functional claim foods are expected to appear on store shelves as early as June.

<Key Points of the New System>
1. Unlike Tokuho (Specific Health Use Foods), the government does not conduct safety or functionality reviews. The responsibility for the content and explanation of the scientific evidence, as well as ensuring no discrepancy between the scientific evidence and the labeling claims, lies with the manufacturer.
2.Notification to the Consumer Affairs Agency must be made at least 60 days prior to the sales date. Except for certain parts, all submitted materials will be disclosed on the Consumer Affairs Agency's website, allowing other businesses and consumers to verify the content.
3.All food products, including fresh foods, are covered. Therefore, participation is expected not only from food and beverage manufacturers but also from functional ingredient manufacturers, trading companies, farmers, and various other industries.

*Excludes beverages containing alcohol and foods that may lead to excessive intake of lipids or sodium.

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<Key Points of Functional Claims>
Claims can be made about the effects on maintaining or promoting health.
For example, claims can be made for specific body parts, such as "maintains eye health" or "supports quality sleep." However, expressions implying treatment or prevention of diseases, such as "for people with diabetes" or "for people with high blood pressure," or expressions exceeding the scope of health maintenance and promotion, such as "hair growth" or "skin whitening," are not permitted.

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